Uniform Securities Legislation (USL)
May 8, 2003
Uniform Securities Legislation (USL) Project Steering Committee
c/o Jane Brindle, Legal Counsel
Alberta Securities Commission
4th Floor, 300 - 5th Avenue SW
Calgary AB T2P 3C4
Re: Concept Proposal for Public Comment
Dear Committee Members:
Thank you for the opportunity to offer our observations and comments regarding the USL Concept Proposal. Financial Planners Standards Council's (FPSC) interest in your efforts is two-fold. Firstly, we and our supporting organizations (listed in the enclosed Annual Report) share your concern regarding the protection of the investing public and the integrity of the industry that serves them. And, secondly, we wish to encourage you to employ FPSC's success in developing uniform rigorous Canadian standards of financial planning competence and ethics so as to meet your goal of "mitigating concerns about complexity, duplication, costs, delays and conflicting policies" as they relate specifically to regulated proficiency and ethics standards pertaining to financial planning.
For more than eight years, FPSC has developed and enforced uniform standards of professional competence and ethics for Certified Financial Planner® (CFP®) designated professionals working in all segments of the Canadian financial services industry who offer financial planning advice as either an ancillary service to the sale of products or as a separate and distinct offering. To date, in excess of 15,500 individuals have voluntarily met FPSC's rigorous requirements in education and experience, have made the commitment to abide by a strict code of professional ethics, have proven their competence in financial planning and continue to meet annual licensing requirements in continuing education and professional conduct - all for the privilege of using the internationally recognized Certified Financial Planner® and CFP® registered certification marks.
In the absence of regulation governing the offering of financial planning advice, FPSC introduced the CFP certification process to create and define a profession that benefits the consumer of financial planning services and the reputation of the industry through which these services are offered. Our success to date is measured in the exponential growth of Canadian CFP designates and in broad industry and market recognition of the CFP designation as the gold standard in financial planning. FPSC, year after year, has exceeded its goal in offering the public a way to identify qualified and ethical financial planning professionals.
For more than three-years the Ontario Securities Commission has needlessly attempted to duplicate CFP standards and set a redundant (and now dated) trial financial planning proficiency examination that was intended to be mandatory for OSC registrants wishing to hold out as financial planners. Multilateral Instrument 33 107 (the Financial Planning Rule), while an OSC-driven initiative, was ostensibly created to be a nationally adopted guide for provincial regulation of financial planning proficiency standards for securities registrants and life-licensed agents. Since its rejection in Spring 2001 by the then sitting Ontario Minister of Finance, there still remains a regulatory void in the area of financial planning competency and ethics standards in Ontario and in all other provinces except British Columbia, where the CFP is the regulatory standard, and in Quebec. However, thanks to the work of FPSC, no such void exists in the marketplace. Here the CFP has become the recognized professional standard of financial planning.
Please recognize that the vast majority of CFP professionals are registrants of provincial securities and insurance regulators. They work in banks, brokerages, insurance companies, accounting firms, mutual fund companies and in large and small financial planning firms across the country. Therefore, we believe the success of your initiative would be greatly expedited through formal recognition and use of all we have already accomplished to obtain nation-wide, cross-sector recognition of the CFP certification as the highest standard in financial planning. Also, we believe that because Canadians are becoming increasingly aware of the CFP designation and the standards it represents, uniform regulatory recognition of the CFP standards will build on an already solid reputation and recognized brand.
FPSC also understands and shares the Committee's desire for the USL to introduce harmonized proficiency requirements for all registrants that conform to SRO requirements where possible. With regards to this goal too, the adoption of CFP licensing as a standard is clearly a logical, cost-effective approach. Consider that the IDA and MFDA have in place a proficiency requirement of financial advisors that can be easily aligned to the CFP level: Their current requirement is the completion of an educational program (the Canadian Securities Institute's Professional Financial Planning Course) that already qualifies individuals to write the CFP examination that is mandatory for CFP certification. Therefore, IDA and MFDA member financial advisors who wish to hold out as financial planners could go on, with no back-tracking, to earn the CFP designation. In fact, many already have gone on to earn the CFP to comply with their employer's requirements such as those of CIBC Imperial Service, Investor's Group and Clarica.
In closing, I ask you to recognize that the CFP certification process has evolved because industry participants continue to believe, like your committee, that the multi-lateral adoption of uniform standards of the highest order will protect the public and is integral to maintaining consumer confidence in our industry. Financial planning is today a fledgling profession that is defined by the CFP certification process and the more than 72,000 international financial planners who hold the CFP designation. Legislation that recognizes this, will indeed be cost-effective, efficient and exemplary.
We applaud your efforts and offer our expertise and experience in standard-setting to assist you in achieving your laudable goals. For your immediate reference, we have enclosed materials that will familiarize you with the accomplishments and on-going work of FPSC. Please do not hesitate to contact us should you desire further explanation of how FPSC has so successfully rallied support and recognition for its work in developing the profession of financial planning.
Yours truly,
Donald J. Johnston
President
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